Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2011

Revenue and Taxation Code

Property Taxation

Part 2. Assessment

Chapter 3. Assessment Generally

Article 1. General Requirements

Section 401.20

401.20. High technology industries; full cash value. (a) (1) The State Board of Equalization shall, in consultation with the California Assessors' Association and representatives of the computer, semiconductor, and biopharmaceutical industries, conduct a study to obtain and analyze data in order to update the information used to develop the valuation factors annually published by the State Board of Equalization that are applied to nonproduction computers, semiconductor manufacturing equipment, and biopharmaceutical industry equipment and fixtures.

(2) The State Board of Equalization shall conduct the study described in paragraph (1) only if funds are appropriated by the Legislature to the board for that purpose during the 2005–06 Regular Session.

(3) To the extent the State Board of Equalization periodically conducts these studies, the board shall publish revised valuation factors based on the updated information. If the board reviews the data and determines that an update is not warranted, the existing factors shall remain in effect.

(b) (1) Notwithstanding any other provision of law relating to the determination of the values for property tax assessment, values determined by using valuation factors resulting from the study described in subdivision (a), as instructed by the State Board of Equalization for nonproduction computers, semiconductor manufacturing equipment, and biopharmaceutical industry equipment and fixtures, shall be rebuttably presumed to be the full cash value.

(2) The assessor or the taxpayer shall have the right to present evidence supporting values different from those based on the published factors in order to attempt to overcome the presumption.

(c) The presumption in subdivision (b) shall not apply to any particular tax year if the information upon which the valuation factors for that category of property are based was last reviewed by the State Board of Equalization more than six years before the lien date for that tax year.

(1) The property used in certain high technology focused industries is subject to the rapid pace of technological change.

(2) The annual valuation factors currently published by the State Board of Equalization that are used to assess this property is based upon dated studies, causing the validity of these factors to be questioned and giving rise to costly and time-consuming assessment appeals and litigation.

(3) A new study would allow the development of objective and defensible valuation factors and ensure more accurate assessments.

(4) The uncertainty created by pending appeals and litigation over the valuation of this property is disruptive to industry tax planning, local government finance, and school finance.

(b) It is the intent of the Legislature in enacting this act to do both of the following:

(1) Facilitate uniform assessment practices in the assessment of this property within the State of California.

(2) Facilitate the resolution of disputes over the assessment of this property by clearly establishing a presumption of correctness if county assessors use a prescribed assessment methodology.

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